Pension fees

logical_song

Hi,

My pension adviser has sold on his business and I've been offered a choice of new deals by the new company.
I'm 67 and still currently working but will be starting to take money from my pension pot in a few years. I have around £500,000 invested.
The new deals are both on the Aegon platform (0.14% charge) plus a fee (0.5%) then either 0.85% fund charge for the Cirilium Passive portfolio or 1.24% for the Cirilium Active portfolio. So that's 1.49% (Passive) or 1.88% (Active). These both seem rather high and are higher that I was paying previously at 1.14%.
I have looked at Nutmeg and read the comments on this site, however if I'm investing £500,000 then the annual fee is 0.3%. Fees (+0.19% average underlying fund costs). Fees are important but the financial stability is much more so.
I don't feel confident enough to choose my own funds for a SIPP and like the idea of being able to choose from a limited range of portfolios and leave it at that.

Any advice welcome,
Chris

dunstonh

The new deals are both on the Aegon platform (0.14% charge) plus a fee (0.5%) then either 0.85% fund charge for the Cirilium Passive portfolio or 1.24% for the Cirilium Active portfolio. So that's 1.49% (Passive) or 1.88% (Active). These both seem rather high and are higher that I was paying previously at 1.14%.

That offering seems to suggest that its not an IFA firm but a tied/restricted adviser firm.

The reason I say that is that it is an in-house fund solution typically used by restricted advisers. If it was an IFA, you would expect either a bespoke portfolio (on £500k) or if you really wanted a simple multi-asset solution (unlikely on £500k but possible) then you would usually use more funds from different fund houses (to give a spread and not have all eggs in one basket) and include cheaper ones than that. However, a restricted adviser, would not necessarily have that choice.

Prices will vary a lot from good value to damned expensive. Advised will cost more than DIY on a like for like basis. However, what you have shown is a bit more expensive. Especially for what it actually is. Most platforms are around the 0.25-0.40% mark. Adviser charge of 0.50% p.a. is exactly where you expect it. Fund charge is where this one works out expensive. If you wanted passives, then an IFA can build the portfolio using passives at 0.1% typical. If you want managed then around 0.8% typical. Or a combination (as is often the best) giving you something in between.

logical_song

Thanks for the quick reply. Yes, you're right they are tied.

dunstonh

logical_song wrote: »

Thanks for the quick reply. Yes, you're right they are tied.

So, that pretty much means that you should switch to an IFA if want an advised service. There is no point paying more for less.